In the summer of 2025, the Portuguese government reinitiated a project to privatize its national airline TAP Air Portugal, intending to sell a considerable share within a year. This effort has gained traction, with Air France-KLM and Lufthansa Group showing interest and providing binding bids.
The privatization strategy focuses on the sale of a 44.9% stake, with the possibility of relinquishing a controlling interest over time. Employees are set to receive a 5% stake, while the government would retain 50.1% ownership. Previous attempts were hindered by political turmoil, but the current administration is advancing the initiative despite not having a parliamentary majority.
Historically unprofitable, TAP Air Portugal recorded a €1.6 billion loss in 2021 due to the pandemic, which led to a €3.2 billion investment from the government. Since then, the airline has gradually returned to profitability, reporting earnings of €65.6 million, €177.3 million, €53.7 million, and €4.1 million from 2022 to 2025.
Although TAP is not a significant profit driver, it provides strategic advantages thanks to its robust networks to Brazil, Africa, and the United States. These routes are essential for airline coalitions looking to broaden their reach or thwart competitors from establishing themselves.
Air France-KLM suggests making Lisbon a distinct Southern European hub, improving connectivity between the Americas and Africa. TAP would be integrated into the SkyTeam transatlantic joint venture, collaborating with Delta on codesharing and loyalty initiatives. The plan stresses labor harmony and participation in the Flying Blue program.
Lufthansa Group underscores its expertise with national airlines such as SWISS and Austrian, maintaining their unique identities while delivering scale and stability. The group aims to bolster Lisbon as an Atlantic hub, enhancing services to Latin America, Africa, and North America.
The Portuguese government will evaluate the proposals, with a decision anticipated shortly. The result could have a significant effect on TAP’s future and the European aviation sector.